Cost Accounting - Advantages

1. welcome

2. Presentation by
J.Keerthana
M.Kesavanandhini

5. Advantages of cost accounting

6. Advantages of cost
accounting
Guide in Reducing Prices
Information for Proper Planning
Expansion in Production
Profitable and Unprofitable Activities
Measurement and Improvement of Efficiency

7. Guide in Reducing Prices
In certain periods it becomes necessary to reduce the price even below the total cost. This will be so
when there is a depression or slump. Costs, properly ascertained, will guide management in this
direction.

8. For a proper system of Costing, it is necessary to have detailed information about the facilities
available about machine and labour capacity. This helps in proper planning of work so that no
section is overworked and no section remains idle.
Information for Proper Planning

9. Sometimes it is necessary to decide whether production of one product or the other is to be increased. This
problem can also be solved only if proper information about costs is available.
Expansion in Production

10. Profitable and Unprofitable Activities
It will throw light upon those activities which bring profits and those activities which result in losses.
This will be done only if the cost of each product or each job is ascertained and compared with the price
obtained.

11. Measurement and Improvement of Efficiency
The chief advantage to be gained is that Cost Accounting will enable a concern to, first of all, measure its
efficiency and then to maintain and improve it. This is done by suitable comparisons and analysis of the
differences that may be observed.

12. THANK YOU